Council debates landlord fee hike

TUPELO – A plan to hit city landlords with higher business-permit fees dominated discussion Tuesday during a City Council work session at City Hall.
The plan is part of a broad $15.7 million initiative called the Tupelo Neighborhood Revitalization Plan. It aims to revitalize the city and grow its middle class, which has increasingly moved out to the rural and suburban areas.
Council members spent nearly two hours hashing out details of the overall plan, which first was presented last month by the Community Development Foundation. CDF had organized four ad-hoc committees of volunteer business leaders to study and develop the plans.
Most council members favor the plan – or least portions of it – but the financial burden proposed for landlords to fund new city code inspectors caused concern.
Under the proposal, landlords would pay $240 per year per single-family dwelling or duplex. Owners of larger apartment complexes would pay $120 per unit per year. They also would be required to have a security bond – $10,000 for landlords with single-family houses or duplexes; $100,000 for owners of large complexes.
Some council members said it’s unfair to charge good landlords the same fees assessed to slumlords.
“I do not want to penalize the good landlords,” said Ward 6 Councilman Mike Bryan.
Others, though, said it’s important to charge everyone the same rate, regardless of their properties’ conditions.
“There is a reason we have 38 percent rental housing in Tupelo,” said CDF President and CEO David Rumbarger. “And that’s because it’s a good deal here. It’s too good. We need to start charging landlords for the services the city provides, like code inspection.”
The CDF committee that researched the rental plan found that, in a survey of several similar-sized Southern cities, those with more than 25 percent rental housing had worse crime rates. One of the plan’s goals, Rumbarger reminded the council, is to reduce Tupelo’s percentage of rental housing overall.
According to the plan, the fee structure applied to Tupelo landlords would generate $850,000 annually in revenues. Forty percent of that would go toward hiring new code enforcement officers. The city currently has two employees assigned to that task, but Development Services Department Director BJ Teal said she needs at least one code enforcement officer for each of the city’s seven wards.
It costs the city about $47,000 per year for each new code enforcement officer it hires, Teal said.
The rest of the money generated from fees would go toward purchasing and rehabbing or demolishing dilapidated properties, as well as lot mowing and general property cleanup. Teal said the majority of cases involve rental property, not owner-occupied homes.
That didn’t satisfy Ward 7 Councilman Willie Jennings, who himself is a landlord. Jennings said the city shouldn’t impose the same fees on landlords who pass inspections and keep up their properties as it might on those who violate codes and rack up infractions. He also said $240 per year for a single-family dwelling seemed too expensive.
Ward 1 Councilman Markel Whittington agreed.
But Ward 5 Councilman Jonny Davis said the fees seemed fair to him. He worried only about the security bonds, a source of contention for most of the landlords he said spoke to him about the plan. Davis said he wants the bond applied only to negligent landlords – not to those who pass inspections and keep up their units.
The council now wants public input on the plan before it makes any changes to the recommendations, which also include a home-improvement grant, a secondary mortgage loan program and a college tuition guarantee. It plans to hold at least one, if not several, public hearings in the coming weeks.
“We can discuss this thing from here to Jerusalem,” he said, “but we need to take action in a reasonable amount of time.”
Contact Emily Le Coz at (662) 678-1588 or emily.lecoz@journalinc.com.